Sorrell v IMS Health Has Far-Reaching Privacy Implications

On April 26, 2011, the U.S. Supreme Court heard the case of Sorrell et al. v. IMS Health Inc. et al. At issue is the constitutionality of a Vermont state statute that prohibits the use of drug prescribing information for the purpose of commercial marketing of drugs to physicians and other prescribers, without the consent of the prescriber. The data at issue is identified by prescriber but is de-identified (per standards under the Health Insurance Portability and Accountability Act or HIPAA) with respect to patients. Both the state of Vermont and a number of amici contend that the statute was enacted in part to protect privacy interests of both patients and prescribers. A number of health data mining companies challenged the law, claiming their use of this information for marketing purposes is protected by the First Amendment.

CDT drafted an in-depth memo examining the issues raised (and not raised) in the case; the arguments made in the memo were summarized in a recent Perspectives piece in iHealthBeat. We raised significant concerns about the potential for the Court to hold that the First Amendment rights of corporations trump the privacy of patients and others. However, we questioned whether Vermont’s law was legitimately aimed at protecting the privacy rights of patients. We also cautioned that recognition by the Court of a broad privacy right on the part of physicians and other prescribers could derail a number of important health reform efforts that require collection and analysis of data about provider treatment patterns.

A review of the transcript from the hearing suggests that the Justices did not buy the argument that the Vermont statute was enacted to protect patient privacy. To the extent that the patient privacy issue was raised at all, Justice Ginsberg seemed to conclude that “the patient is already taken care of by the Federal law.” (HIPAA prohibits the sale of patient-identifiable data for marketing purposes.) There was, however, more discussion about whether Vermont could legitimately enact a statute that provided physicians and other prescribers with some choice as to whether data about their prescribing practices could be sold for commercial marketing purposes.

Of note, a number of Justices – including Justices Scalia, Roberts, Kennedy and Ginsburg – seemed to focus most on whether the Vermont law violated the First Amendment because it discriminated against commercial speech – prohibiting the use of this data for commercial marketing purposes while allowing it to be used for speech promoting Vermont’s interest and the interests of health insurers in controlling drug costs. For example, Justice Ginsberg questioned the attorney for the State of Vermont about how the statute could be upheld in light of the Court’s precedents striking down statutes that favor one speaker over another.

We are facing an important moment in the effort to secure comprehensive personal information privacy protections for consumers. That effort would be upended if the Court were to find in this case that corporate First Amendment rights trump privacy protections. However, the confrontation between corporate First Amendment rights and privacy can be avoided if the Court decides this case on the narrow basis of whether the statute inappropriately discriminates against particular types of speech or speakers.